> Gates, Case, Turnabout and Fair Play: The long-anticipated AOL Time Warner union cleared its final regulatory hurdle last week, receiving the Federal Communications Commission's blessing—but not without the company first agreeing to allow instant-messaging (IM) service interoperability with at least one other provider upon rollout of its "advanced" features, and interoperability with at least two other rivals six months later. The agreement echoes a similar prenup crafted by the Federal Trade Commission (FTC), which last month approved the AOL Time Warner merger on the condition that the company open up its high-speed cable network to at least two other service providers. Debate over the provisions has resulted in a re-drawing of battle lines on the question of how government should act to foster competition and innovation in the digital arena—with some surprising shifts in allegiance. To wit: none other than Bill Gates reportedly called FCC chairman William Kennard to argue for tight regulation of IM—lest AOL leverage its estimated 90 percent market share to create an IM monopoly. AOL's Steve Case, meanwhile, had already paid Kennard a visit to argue against placing federal restrictions on IM—on the grounds that to do so would (natch) stifle innovation.

***EXTRA: How will the George W. Bush administration impact regulatory influence on the high tech industry? Widely considered Bush's top choice for the next FCC chairman, commission member Michael Powell—son of Secretary of State Colin Powell—dissented from the majority vote on IM restrictions. "I believe the majority has given in too much to their collective imaginations, rather than sound reasoning based on the record, in reaching some of the conditions on the merger," Powell wrote. "This order makes clear that the FCC has jurisdiction to regulate virtually every Internet product."

We would like to know you think. Is the FCC extending its influence too far? Or is its current approach appropriate for protecting competition in emerging high tech markets? Write a letter to the editor at filter-editor@cyber.harvard.edu and let us know. Responses will be published in a forthcoming release.

> Dollars and Censorship: What do cigarettes, live animals, used underwear and Nazi memorabilia have in common? All appear on a "blacklist" of items Yahoo, Inc. decided this month to ban from its auction site. Ordered in November by a French court to block Nazi-related items from view by French citizens or face heavy fines, Yahoo responded last month by filing suit in the United States, asking a San Jose, California federal district court to declare that the French ruling should not be enforced. Appearances to the contrary, Yahoo isn't backing off from the suit. "We're trying to improve the quality of the site, and these items have been detracting from the quality," said Brian Fitzgerald, senior producer for Yahoo auctions. "It's important to note that the policy change is not in response to the ruling." Translation? The bottom line is the bottom line. "Yahoo is in a delicate position, and while it may want to make a point about the 'boundarilessness' of the Internet, it's not as though auctions of Nazi memorabilia represent a significant income stream," says Berkman Center Faculty Co-Director Jonathan Zittrain. "There are more attractive cases upon which to stand and fight."

> "Walt Disney" Ending Not Necessarily a Good One: In a bankruptcy court settlement filed last week, the Walt Disney subsidiary that owns 60 percent of ToysMart.com will pay $50,000 in order to purchase and kill the now-defunct company's customer database. ToysMart made national headlines in May when, after filing for bankruptcy, the company took steps to sell customer data it collected under a privacy policy stating that the information would "never" be shared or sold. Slapped with an FTC lawsuit alleging unfair and deceptive business practices, ToysMart subsequently agreed not to sell the data in question to another company unless it operated under ToysMart's original privacy policy. The data was again placed in jeopardy, however, after a federal bankruptcy judge rejected the FTC agreement, declining to place conditions on the sale in the absence of a buyer.

Now Disney is stepping in to save the day—a development legal experts say has both positive and negative implications. "The good news is that a company like Disney recognizes that selling customer data and violating ToysMart's promise to keep that data private is a public relations problem worth $50,000 to fix by killing the list," says Berkman Center Executive Director Eric Saltzman. "The bad news is that such information—even when gathered or deployed in violation of representations to customers—is an asset of a company, and that the bankruptcy court may choose to dispose of the asset as it sees fit. Not every company has Disney's high public profile and the incentive to bury the list. The lesson here is that Internet users can't count on a Disney cartoon hero to ride in at the last minute—we have to protect private information appropriately from the start."

> If At First You Don't Succeed, Lobby—and Lobby Again: Will Congress act this year to establish baseline federal standards for the collection and distribution of personal data online? Not if a lobbying campaign by tech industry groups including the Information Technology Association of America (ITAA) holds sway. "The laundry list of things we need [from Congress] is very short. Everything else is just stopping bad ideas from getting legs," ITAA President Harris Miller told Newsbytes. Joining the fight against privacy legislation is the US Chamber of Commerce, which according to Chamber official Rick Lane will launch a "massive educational campaign" to persuade Congress to give industry self-regulation a second chance.

> Pay Up—And While You're At It, Shut Up: What is the future of copyright online? Let's hope it's not as simple as reading the writing on the iCopyright contract. Under a rights agreement drafted by iCopyright.com, the Albuquerque Journal has begun to charge website operators $50 per link to one of its articles. In addition to forking over the cash, the terms of the agreement require that the linker agree not to say anything "derogatory" about the article itself, "the author, the publication that contains the article, or anyone depicted in the content." Fortunately, the Albuquerque Journal's demand for payment—and no back talk—will likely add up only to wishful thinking. "It's far from clear that they could take any legal action against someone who chose to link freely," says Wendy Seltzer, a Berkman fellow. "Publishers will have more leverage using technology than the law—for example, by offering stable URLs or convenient displays only to those who pay the desired fee."

> Never Tell Me the Odds: The value of tech stocks might not be the only thing falling if it weren't for an unusual bailout last month by the US Defense Department of Iridium Satellite. The Pentagon signed a $72 million deal to use bankrupt Iridium's satellite phone network, providing the Navy and other government users with secure voice communications--and the rest of the planet with peace of mind. According to a Reuters report, NASA has determined that the satellites Iridium originally planned to abandon in space to burn "harmlessly" in the earth's atmosphere actually had a 1 in 250 chance of making it through to hit a human being.

What is in the cards for cyberlaw in the coming year? This week we're featuring a selection of Year 2000 "wrap-up" articles that examine the major developments of the past year and preview what lies ahead:

> Berkman Center Awarded Grant for Innovation: The Berkman Center has been awarded a $220,000 grant from Harvard University Provost's Fund for Innovation. The grant will support the design, development and prototyping of software teaching tools—the Berkman Center's "courseware"—for distance learning and in-class applications. We intend to share the suite of software tools we develop—and the knowledge gleaned from building it—with the Harvard community, to contribute to its development of a platform for computer-mediated teaching and learning.

We currently seek software programmers, Web architects and other tech-savvy individuals to help us realize this vision. If you fit the description and/or want to learn more, follow the link below: